Shane Richmond is Head of Technology (Editorial) for Telegraph Media Group. He first joined the Telegraph in 1998 and has been Online News Editor and Communities Editor. He writes about all kinds of technology but especially Apple, iOS, ebooks and ereaders, and digital media.

The Guardian is wrong about Google

Newspapers are struggling and it's up to Google to do something about it. At least, that's what the Guardian believes.

In a letter to the Department of Culture, Media and Sport [PDF link] last month Guardian Media Group urged the Government to examine the role of news aggregators. Though aggregators, such as Google News, do not carry newspaper stories in full and in fact send traffic to newspaper websites, the Guardian isn't happy.

The letter says: "There is a vast over-supply in the market of advertising inventory, and yields have come under severe downward pressure. As a result, the value of the traffic generated by search engines and aggregators has reduced significantly."

This is different from the row between the music industry and Google over music videos on YouTube because in that case Google is showing the content in its entirety. That argument is over how much Google pays for the rights to the content.

In the case of newspapers, Google is simply advertising our content. If the Guardian can't make enough money out of the traffic Google sends to it why is that Google's problem? Should plumbers complain if they can’t make enough money from the business they get from the Yellow Pages?

If the Guardian doesn't like the arrangement with Google then it can always ask for its content to be removed from the site. Google will happily oblige but that's not good enough for the Guardian either:

"Content creators cannot simply remove their content from the dominant player because the damage to their business would be significant. As such, this increasingly appears to be an issue that requires examination from the point of view of competition law principles."

So the Guardian won't withdraw from content aggregators but doesn't feel it's getting enough from them either. Again, it's difficult to see why this would be Google's problem. So what do they propose?

The letter notes: "Search engines and aggregators benefit from content creators, in the sense that they generate revenue by acting as gateways to content other people produce." The Guardian doesn't suggest any particular remedy but strongly implies that Google should "invest in the creation of content".

If that's true then it follows that Google should invest in all the content on the internet. After all, they put ads on all of their search results. Bloggers, filesharing sites and online shops should all start getting cash from the search engines, surely? Or is it only those who are struggling with their business models who should get a hand-out?

The changes forced on the news business by the internet have left all newspapers under threat. It's up to us to find a way to make the business model work. The economics are fairly straightforward: Google has a surplus of content available to it for aggregation. They aren't going to pay for that content because it is so plentiful. That surplus benefits advertisers too because the over-supply of content means cheaper ad rates.

The cold reality is that a lot of news organisations are going to go out of business, a process that's already begun. With fewer places to advertise, the price of ads will rise and ad-supported services will become more profitable. At least that's one theory. And if that doesn’t happen, well it's still not Google's problem.